Current Canadian GAAS through 2010 did not permit the auditor to refer to a going-concern uncertainty in the audit report when the uncertainty was properly disclosed in the financial statement notes.
a. Describe the strengths and weaknesses of this approach, taking into consideration the perspectives of the company, its financial statement users, and its auditor.
b. Identify one or more alternative reporting methods that may be more beneficial to financial statement users.
c. You have been invited to comment to the Canadian assurance standards-setting board on its current audit reporting standards. What comment would you make to the standard setters on the issue of audit reporting when there is substantial doubt about a company’s ability to continue as a going concern?